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Notice

Crop Revenue Coverage

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Information about this document as published in the Federal Register.

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Start Preamble

ACTION:

Notice of availability.

SUMMARY:

In accordance with section 508(h) of the Federal Crop Insurance Act (Act), since 1996 the Federal Crop Insurance Corporation (FCIC) Board of Directors (Board) has approved for reinsurance and subsidy the insurance of corn, grain sorghum, soybeans, cotton, rice, and wheat in select states and counties under the Crop Revenue Coverage (CRC) plan of insurance submitted by American Agrisurance (AmAg). This notice is intended to inform eligible producers and the private insurance industry of revisions to the Crop Revenue Coverage (CRC) Insurance Policy Basic Provisions, the Crop Revenue Coverage Insurance Policy Wheat Crop Provisions, and the Crop Revenue Coverage Mandatory Actuarial Document Endorsement Commodity Exchange Endorsement—Wheat, for the 2001 and succeeding crop years.

Start Further Info

FOR FURTHER INFORMATION CONTACT:

Tim Hoffmann, Director, Product Development Division, Federal Crop Insurance Corporation, United States Department of Agriculture, 6501 Beacon Dr., Kansas City, Missouri 64133, telephone (816) 926-7387.

End Further Info End Preamble Start Supplemental Information

SUPPLEMENTARY INFORMATION:

Section 508(h) of the Act allows for the submission of a policy to FCIC's Board and authorizes the Board to review and, if the Board finds that the interests of producers are adequately protected and that any premiums charged to the producers are actuarially appropriate, approve the policy for reinsurance and subsidy in accordance with section 508(e) of the Act.

In accordance with section 508(h) of the Act, the Board approved a program of insurance known as CRC, submitted by American Agrisurance, an exclusive marketing agent and wholly owned subsidiary of Acceptance Insurance Companies, Inc. All terms and conditions of the policy and all premium rates are determined by AmAg. FCIC does not have the authority to modify or waive any terms or conditions. FCIC only has the authority to approve or disapprove the terms and conditions submitted by AmAg.

The CRC program has been approved for reinsurance and premium subsidy, including subsidy for administrative and operating expenses in an amount authorized under section 508(e) of the Act. CRC is designed to protect producers against both price and yield losses.

On Tuesday, November 30, 1999, FCIC published a Notice of availability in the Federal Register at 64 FR 66839-66866 to revise the Basic Provisions, Crop Provisions, and Commodity Exchange Endorsements to be effective beginning with the 2000 CRC spring crop programs.

AmAg has requested the CRC program for winter wheat for the 2001 crop year be changed to remove the CRC base price and harvest price for Winter Durum Wheat in Arizona and California, incorporate changes to allow for continuous rating of crop insurance policies, change the cancellation and termination dates for some counties and make minor edits for clarification. The CRC program for durum wheat is being removed from Arizona and California because of an inability to determine prices from the current market. Other changes made include those changes in the administrative fees and producer subsidies as well as the substitution of yields in the producers's actual production history mandated by the Agricultural Risk Protection Act of 2000.

Accordingly, FCIC herewith gives notice of the above stated changes for the 2001 and succeeding crop years.

The CRC policies, endorsements, underwriting rules, questions and answers, premium calculation worksheet, and actuarial documents for the 2001 crop year will be released electronically to all reinsured companies through FCIC's Website.

Notice:

Accordingly, the publication on November 30, 1999, Notice of availability at 64 FR 66839-66866 is adopted with revisions to the Crop Revenue Coverage (CRC) Insurance Policy Basic Provisions, Crop Revenue Coverage Insurance Policy Wheat Crop Provisions, and Crop Revenue Coverage Mandatory Actuarial Document Endorsement Commodity Exchange Endorsement—Wheat, effective beginning with the 2001 crop year as follows:

Crop Revenue Coverage (CRC) Insurance Policy Basic Provisions

1. In section 1, the definitions of “actuarial documents,” “additional coverage,” “administrative fee,” and “approved yield” are revised to read as follows:

Actuarial documents. The material for the crop year which is available for public inspection in your agent's office, and which show the revenue guarantees, coverage levels, practices, insurable acreage, and other related information regarding crop insurance in the county.

Additional coverage. A level of coverage equal to or greater than 50 percent of the approved yield indemnified at 100 percent of the Base Price, or a comparable coverage.

Administrative fee. An amount you must pay for additional coverage for each crop year as specified in section 8.

Approved yield. The actual production history (APH) yield determined in accordance with 7 CFR part 400, subpart G, including any adjustments elected under section 35. This yield is established for basic or optional units. The approved yield for each basic or optional unit comprising an enterprise unit is retained for premium and final guarantee purposes under an enterprise unit.

2. In section 1, the definition of “base premium rate” has been added to read as follows:

Base premium rate. A premium rate used to calculate the risk associated with yield.

3. In section 1, the definition of “CRC rate” has been replaced with “CRC base rate” and is revised to read as follows: Start Printed Page 41938

CRC base rate. The premium rate used to calculate the risk associated with revenue.

4. In section 1, the definition of “Limited coverage” is removed.

5. Section 3(b) is revised to read as follows:

(b) Your application for insurance must contain all the information required by us to insure the crop. Applications that do not contain all social security numbers and employer identification numbers, as applicable, (except as stated herein) coverage level, crop, type, variety or class, plan of insurance, and any other material information required to insure the crop, are not acceptable. If a person with a substantial beneficial interest in the insured crop refuses to provide a social security number or employer identification number, the amount of coverage available under the policy will be reduced proportionately by that person's share of the crop.

6. Section 3(e)(10) is revised to read as follows:

(10) For example, if crop A, with a termination date of October 31, 2000, and crop B, with a termination date of March 15, 2001, are insured and you do not pay the premium for crop A by the termination date, you are ineligible for crop insurance as of October 31, 2000, and crop A's policy is terminated on that date. Crop B's policy is terminated as of March 15, 2001. If you enter an agreement to repay the debt on April 25, 2001, you can apply for insurance for crop A by the October 31, 2001, sales closing date and crop B by the March 15, 2002, sales closing date. If you fail to make a scheduled payment on November 1, 2001, you will be ineligible for crop insurance effective on November 1, 2001, and you will not be eligible unless the debt is paid in full or you file a petition to have the debt discharged in bankruptcy and subsequently receive discharge.

7. Section 4(a), is revised to read as follows:

(a) For each crop year, the Final Guarantee and coverage level at which an indemnity will be determined for each unit will be those used to calculate your summary of coverage. The information necessary to determine those factors will be contained in the Special Provisions or in the actuarial documents.

8. Section 8(c) is revised to read as follows:

(c) Your annual premium amount is determined by:

(1) Multiplying the Approved Yield times the Coverage Level, times the Base Premium Rate, and times the Base Price as defined in the Commodity Exchange Endorsement;

(2) Multiplying the Approved Yield times the Coverage Level, times the CRC Base Rate, and times the CRC Low Price Factor specified in the actuarial documents;

(3) Multiplying the Approved Yield times the Coverage Level, times the Base Premium Rate, and times the CRC High Price Factor specified in the actuarial documents;

(4) Adding sections 8(c)(1), (2), and (3);

(5) Multiplying the result of section 8(c)(4) times the Acres insured, times your Share at the time coverage begins, and as applicable, times any CRC Option Factor; Yield Adjustment Surcharge; and/or CRC Enterprise Option Factor;

(6) Multiplying the result of section 8(c)(5) times the applicable producer subsidy percentage to calculate the appropriate amount of subsidy. The producer subsidy percentage is based upon the coverage level and is contained in the actuarial documents; and

(7) Subtracting section 8(c)(6) from section 8(c)(5).

9. Section 8(d) is removed and the remaining section is redesignated, accordingly.

10. Section 8(e) redesignated as 8(d) is revised as follows:

(d) In addition to the premium charged:

(1) You, unless otherwise authorized in 7 CFR part 400, must pay an administrative fee each crop year of $30 per crop per county.

(2) The administrative fee must be paid no later than the time that premium is due.

(3) Payment of an administrative fee will not be required if you file a bona fide zero acreage report on or before the acreage reporting date for the crop. If you falsely file a zero acreage report, you may be subject to criminal and administrative sanctions.

(4) The administrative fee will be waived if you request it and you qualify as a limited resources farmer.

(5) Failure to pay the administrative fees when due may make you ineligible for certain other USDA benefits.

11. Section 34(c) is revised to read as follows:

(c) A written agreement may only be used to insure a CRC crop in a county without a CRC program if the county without a CRC program is adjacent to a county with a CRC program;

12. Section 35 is added as follows:

Section 35. Substitution of Yields

You may elect to exclude actual yields used to calculate the APH yield that are less than 60 percent of the applicable transitional yield (T-yield), as defined in 7 CFR 400.52. Each excluded actual yield will be replaced with a yield equal to 60 percent of the applicable T-yield for the county. The replacement yields will be used in the same manner as actual yields for the purpose of calculating the APH yield. Premium rates for approved yields that are adjusted under this section will be based on your yield prior to replacing the actual yields or such other basis as determined appropriate by us.

Crop Revenue Coverage Insurance Policy Wheat Crop Provisions

13. Section 3 is revised to read as follows:

3. Coverage Level

In addition to the requirements of section 4 of the Basic Provisions all the insurable acreage of wheat in the county insured as grain under this policy will have the same coverage level.

14. Section 5 is revised to read as follows:

5. Cancellation and Termination Dates

In accordance with section 3(h) of the Basic Provisions, the cancellation and termination dates are:

State and countyCancellation dateTermination date
All Colorado counties except Alamosa, Archuleta, Conejos, Costilla, Custer, Delta, Dolores, Eagle, Garfield, Grand, La Plata, Mesa, Moffat, Montezuma, Montrose, Ouray, Pitkin, Rio Blanco, Rio Grande, Routt, Saguache, and San Miguel; all Iowa counties except Plymouth, Cherokee, Buena Vista, Pocahontas, Humbolt, Wright, Franklin, Butler, Black Hawk, Buchanan, Delaware, Dubuque and all Iowa counties north thereof; all Wisconsin counties except Buffalo, Trempealeau, Jackson, Wood, Portage, Waupaca, Outagamie, Brown, Kewaunee and all Wisconsin counties north thereof; and all other states except Alaska, Arizona, California, Connecticut, Idaho, Maine, Massachusetts, Minnesota, Montana, Nevada, New Hampshire, New York, North Dakota, Oregon, Rhode Island, South Dakota, Utah, Vermont, Washington, and WyomingSeptember 30September 30.
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Archuleta, Custer, Delta, Dolores, Eagle, Garfield, Grand, La Plata, Mesa, Moffat, Montezuma, Montrose, Ouray, Pitkin, Rio Blanco, Routt and San Miguel counties, Colorado; Connecticut; Idaho; Plymouth, Cherokee, Buena Vista, Pocahontas, Humboldt, Wright, Franklin, Butler, Black Hawk, Buchanan, Delaware and Dubuque counties, Iowa, and all Iowa counties north thereof; Massachusetts; all Montana counties except Daniels and Sheridan; New York; Oregon; Rhode Island; all South Dakota counties except Corson, Walworth, Edmonds, Faulk, Spink, Beadle, Kingsbury, Miner, McCook, Turner, Yankton and all South Dakota counties north and east thereof; Washington; Buffalo, Trempealeau, Jackson, Wood, Portage, Waupaca, Outagamie, Brown and Kewaunee counties, Wisconsin, and all Wisconsin counties north thereof; and all Wyoming counties except Big Horn, Fremont, Hot Springs, Park, and WashakieSeptember 30November 30.
Arizona; California; Nevada; and UtahOctober 31November 30.
Alaska; Alamosa, Conejos, Costilla, Rio Grande and Saguache counties, Colorado; Maine; Minnesota; Daniels and Sheridan counties, Montana; New Hampshire; North Dakota; Corson, Walworth, Edmunds, Faulk, Spink, Beadle, Kingsbury, Miner, McCook, Turner, and Yankton counties, South Dakota, and all South Dakota counties north and east thereof; Vermont; and Big Horn, Fremont, Hot Springs, Park, and Washakie counties, WyomingMarch 15March 15.

15. Section 11(e)(2)(i) is revised to read as follows:

(i) Deficiencies in quality, in accordance with the Official United States Standards for Grain, result in wheat not meeting the grade requirements for U.S. No. 4 (grades U.S. No. 5 or worse) because of test weight, total damaged kernels (heat-damaged kernels will not be considered to be damaged), shrunken or broken kernels, defects (foreign material and heat damage will not be considered to be defects), a musty, sour, or commercially objectional foreign odor (except smut odor) or grading garlicky, light smutty, smutty or ergoty;

16. The Crop Revenue Coverage Mandatory Actuarial Document Endorsement Commodity Exchange Endorsement—Wheat, is revised to read as follows:

Crop Revenue Coverage Mandatory Actuarial Document Endorsement Commodity Exchange Endorsement—Wheat

(This is a Continuous Endorsement)

If a conflict exists among the policy provisions, the order of priority is as follows: (1) The Special Provisions; (2) this Commodity Exchange Endorsement; (3) the Crop Provisions; and (4) the Basic Provisions, with (1) controlling (2), etc.

How this endorsement affects your coverage:

(I) This endorsement is attached to and made a part of your Crop Revenue Coverage (CRC) Wheat crop policy provisions and actuarial documents, subject to the terms and conditions described herein.

(II) This endorsement specifies how, where, and when commodity prices for your CRC Wheat policy are determined.

(III) This endorsement defines the Average Daily Settlement Price, as used in the Base Price and Harvest Price, as—The average calculated by totaling all the daily settlement prices for the contract specified in the applicable Base Price or Harvest Price definition (established on full active trading days), during the month specified in the applicable Base Price or Harvest Price definition, and dividing that sum by the total number of days included in the total. The average must include at least fifteen (15) days and each day included in the average must be a full active trading day for the contract specified in the applicable Base Price or Harvest Price definition. A full active trading day is any day on which there are twenty-five (25) or more open interest contracts of the contract specified in the Base Price or Harvest Price definition. If there are less than fifteen (15) full active trading days for the contract specified in the applicable Base Price or Harvest Price definition, during the month specified in the applicable Base Price or Harvest Price definition, then additional daily settlement prices, established on full active trading days, for the contract immediately prior to the contract specified in the applicable Base Price or Harvest Price definition, during the month specified in the applicable Base Price or Harvest Price definition, will be used until there are fifteen (15) prices from fifteen (15) full active trading days included in the average.

(IV) This endorsement defines the Base Price and Harvest Price as shown in Section 1 of the Crop Revenue Coverage Basic Provisions by wheat type and state as follows:

Winter Wheat—(Insured as winter wheat), Chicago Board of Trade (CBOT)

Illinois, Indiana, Michigan, Ohio, and Wisconsin

Base Price (CBOT)—The August 15 to September 14 pre-harvest year's average daily settlement price for the harvest year's CBOT July soft red winter wheat futures contract rounded to the nearest whole cent. The Base Price will be released as an actuarial document addendum by September 20 of the pre-harvest year.

Harvest Price (CBOT)—The July 15 to August 14 harvest year's average daily settlement price for the harvest year's CBOT September soft red winter wheat futures contract rounded to the nearest whole cent. The Harvest Price cannot be less than the Base Price minus two dollars ($2.00), or greater than the Base Price plus two dollars ($2.00). The Harvest Price will be released as an actuarial document addendum by August 20 of the harvest year.

Winter Wheat—(Insured as winter wheat), (CBOT)

Alabama, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, and Virginia

Base Price (CBOT)—The August 15 to September 14 pre-harvest year's average daily settlement price for the harvest year's CBOT July soft red winter wheat futures contract rounded to the nearest whole cent. The Base Price will be released as an actuarial document addendum by September 20 of the pre-harvest year.

Harvest Price (CBOT)—The June harvest year's average daily settlement price for the harvest year's CBOT July soft red winter wheat futures contract rounded to the nearest whole cent. The Harvest Price cannot be less than the Base Price minus two dollars ($2.00), or greater than the Base Price plus two dollars ($2.00). The Harvest Price will be released as an actuarial document addendum by July 10 of the harvest year. Start Printed Page 41940

Winter Wheat—(Insured as winter wheat), Kansas City Board of Trade (KCBOT)

Iowa, Montana, Nebraska, South Dakota, and Wyoming

Base Price (KCBOT)—The August 15 to September 14 pre-harvest year's average daily settlement price for the harvest year's KCBOT July hard red winter wheat futures contract rounded to the nearest whole cent. The Base Price will be released as an actuarial document addendum by September 20 of the pre-harvest year.

Harvest Price (KCBOT)—The July 15 to August 14 harvest year's average daily settlement price for the harvest year's KCBOT September hard red winter wheat futures contract rounded to the nearest whole cent. The Harvest Price cannot be less than the Base Price minus two dollars ($2.00), or greater than the Base Price plus two dollars ($2.00). The Harvest Price will be released as an actuarial document addendum by August 20 of the harvest year.

Winter Wheat—(Insured as winter wheat), (KCBOT)

Arizona, Arkansas, Colorado, Kansas, Missouri, New Mexico, Oklahoma, and Texas

Base Price (KCBOT)—The August 15 to September 14 pre-harvest year's average daily settlement price for the harvest year's KCBOT July hard red winter wheat futures contract rounded to the nearest whole cent. The Base Price will be released as an actuarial document addendum by September 20 of the pre-harvest year.

Harvest Price (KCBOT)—The June harvest year's average daily settlement price for the harvest year's KCBOT July hard red winter wheat futures contract rounded to the nearest whole cent. The Harvest Price cannot be less than the Base Price minus two dollars ($2.00), or greater than the Base Price plus two dollars ($2.00). The Harvest Price will be released as an actuarial document addendum by July 10 of the harvest year.

Spring Wheat—(Insured as spring wheat in counties with a 3/15 cancellation date), Minneapolis Grain Exchange (MGE)

Colorado, Minnesota, Montana, North Dakota, South Dakota, and Wyoming

Base Price (MGE)—The February harvest year's average daily settlement price for the harvest year's MGE September hard red spring wheat futures contract rounded to the nearest whole cent. The Base Price will be released as an actuarial document addendum by March 10 of the harvest year.

Harvest Price (MGE)—The August harvest year's average daily settlement price for the harvest year's MGE September hard red spring wheat futures contract rounded to the nearest whole cent. The Harvest Price cannot be less than the Base Price minus two dollars ($2.00), or greater than the Base Price plus two dollars ($2.00). The Harvest Price will be released as an actuarial document addendum by September 10 of the harvest year.

Spring Wheat—(Insured as spring wheat in counties with a 9/30 cancellation date), (KCBOT/MGE)

Colorado, Iowa, Montana, South Dakota, Wisconsin, and Wyoming

Base Price (KCBOT)—The August 15 to September 14 pre-harvest year's average daily settlement price for the harvest year's KCBOT July hard red winter wheat futures contract rounded to the nearest whole cent. The Base Price will be released as an actuarial document addendum by September 20 of the pre-harvest year.

Harvest Price (MGE)—The August harvest year's average daily settlement price for the harvest year's MGE September hard red spring wheat futures contract rounded to the nearest whole cent. The Harvest Price cannot be less than the Base Price minus two dollars ($2.00), or greater than the Base Price plus two dollars ($2.00). The Harvest Price will be released as an actuarial document addendum by September 10 of the harvest year.

Wheat—Portland Grain Exchange (PGE)

California, Idaho, Oregon, Utah, and Washington

Base Price (PGE)—The Portland Price equals the August 15 to September 14 pre-harvest year's average daily settlement price for the harvest year's CBOT September soft red winter wheat futures contract (rounded to the nearest whole cent) plus an adjustment equal to the current five-year average difference between the August average daily settlement price for the nearby CBOT September soft red winter wheat futures contract (rounded to the nearest whole cent) and the August average daily settlement price for the PGE soft white wheat contract (rounded to the nearest whole cent). The Base Price will be released as an actuarial document addendum by September 20 of the pre-harvest year.

Harvest Price (PGE)—The August harvest year's average daily settlement price for the PGE soft white wheat contract rounded to the nearest whole cent. The Harvest Price cannot be less than the Base Price minus two dollars ($2.00), or greater than the Base Price plus two dollars ($2.00). The Harvest Price will be released as an actuarial document addendum by September 10 of the harvest year.

Durum Wheat—(Insured as durum wheat in counties with a 3/15 cancellation date), (MGE)

North Dakota counties of Benson, Bottineau, Burke, Cavalier, Divide, Mclean, Mountrail, Nelson, Pierce, Ramsey, Renville, Rolette, Towner, Ward, Williams

Base Price (MGE)—The February harvest year's average daily settlement price for the harvest year's MGE September durum wheat futures contract rounded to the nearest whole cent. The Base Price will be released as an actuarial document addendum by March 10 of the harvest year.

Harvest Price (MGE)—The August harvest year's average daily settlement price for the harvest year's MGE September durum wheat futures contract rounded to the nearest whole cent. The Harvest Price cannot be less than the Base Price minus two dollars ($2.00), or greater than the Base Price plus two dollars ($2.00). The Harvest Price will be released as an actuarial document addendum by September 10 of the harvest year.

All other terms and conditions of the Policy remain unchanged.

Start Signature

Signed in Washington, D.C. on June 29, 2000.

Kenneth D. Ackerman,

Manager, Federal Crop Insurance Corporation.

End Signature End Supplemental Information

[FR Doc. 00-17150 Filed 7-6-00; 8:45 am]

BILLING CODE 3410-08-U